U.S. CLARITY Act stalls as banks and crypto firms clash over stablecoin yield rules

The White House-backed CLARITY Act has stalled in the U.S. Senate amid a dispute over whether dollar-pegged stablecoins can offer yield-like returns, according to Congressional and industry discussions. Banks argue that even limited stablecoin rewards could drain an estimated $500 billion from U.S. bank deposits by end-2028, citing Standard Chartered projections, while crypto firms counter that such incentives help digital dollars compete with traditional payment rails under GENIUS Act reserve rules requiring full cash backing. The Congressional Research Service noted on March 6 that the GENIUS Act bars issuers from directly paying yields but leaves unclear whether intermediaries in triparty models can pass economic benefits to customers, a gap banks want closed. Industry figures including Coinbase CEO Brian Armstrong and Bitwise CIO Matt Hougan, along with Galaxy Digital research and prediction markets Polymarket and Kalshi, indicate that if the CLARITY Act misses key deadlines in late April and early May, stablecoin yield boundaries may instead be set by agencies such as the Office of the Comptroller of the Currency rather than by Congress.